As a general observation, since the opening up reforms, the economic freedom of ordinary people has increased. However, reforms are taking a gradual road in China. As they walk along this road, people’s freedom gradually expands, and abstract rights protecting freedom also gradually develop. Only, the development of freedom and that of abstract rights protecting freedom are not in balance.

I have said before that after 1979, China’s urbanization graph rose back up, and recorded that for urban and rural residents, but particularly rural residents, the scope of economic freedom increased significantly. However, the imbalance of progressive reform has induced many imbalance rights problem in multi-dimentional economic reform. This has a profound impact on the process of urbanization in China.

Let’s talk a bit about the example of “land urbanization”. What is “land urbanisation”? The literal meaning is not complicated, it means nothing more than that land which used to be classified as rural and used by farmers for agricultural production has now turned to the city, and been allocated for urban construction. If the proportion of urban population among the overall population represents the “urbanization of the population”, then the proportion of the total land used for urban constructions represents the “urbanization of the land”.

Commonsense says that as the rate of urban population increases, so city limits must be expanded and urban land use increase. In a big metropolitan city like Beijing, the current population is around 20 million. When such a large number of people gather together, of course, they occupy more land than a 5 million people city, or a 10 million people city. Up to this point, no problem, it’s the same in all ages and everywhere, and there’s no need to make a fuss of it.

The problem is, people have found out that in recent years, the rate of “land urbanization” in the country grew far more quickly than the rate of urban population increased. From what I’ve read, the first to point out this was Paul Wen, professor of Economics at Trinity College in the United States. Guanzhong graduated from Fudan University and had worked at Chinese Academy of Social Science, and he had also studied overseas , and used to be a student of Professor Gail Johnson at University of Chicago. He is an old friend of mine. In 1988, we went to Meitan to investigate land issues, and in a blink of an eye, twenty years have passed already.

In July 2009, we held a conference to discuss the Chengdu experience in Langrun Park, and Professor Wen Guanzhong was one of the invited guests. I remember his main argument, at that time: that our urbanization process had undergone some deviation. And his most critical point was that the growth in urbanized land area was faster than that of the urban population growth! At that period of time, Guanzhong was researching the urbanization of Shanghai. He pointed out that the Pudong model, which suggests to occupy the land first has deviated from the right path. Himself supported the Puxi model – a small place with large population, giving a strong sense of urban life. Whether you would agree or not, the concept of “land urbanization exceeds population urbanization” has become popular since that time. I wanted to make an advertisment for Guanzhong here. If there is any mistake, please correct me.

He grew up in Puxi, and so had enough experiences to support his point of view. But after reading Paul’s article for the first time, my thoughts ran in a different direction: if the urbanization of the land grows more quickly than that of the population, does that not mean a decline in urban population density? And so, can we speak of urbanisation, should that not count as “counter-urbanization”?

That’s how it is, with the surge of “urbanization”, people don’t even really know what “the city” is! Just after this column was launched, there was a clear definition of the city based on “density” (see “urban and rural China”, part two). According to the authors, it is the increasing density of the space that reflects the aggregation of population; and because the population aggregates, needs and demands brought together are numerous enough to accomodate a broader division of labour, thereby promoting productivity gains and pushing up incomes: so this higher degree of population aggregation exerts a form of attraction that is difficult to resist. From this point of view, urban density is the core feature of urbanization. How can urbanisation happen without stimulations caused by increased level of labor division, income and productivity.

What is happening now? Because the urban land area increases faster than the urban population, it means that urban density is falling rather than rising! Readers shouldn’t think I’m just playing with words here, there’s actually a big problem in the package: if urbanization loses its own ‘core’, or if the core thins out, then can it sustain its own movement over the long time? And can it still bear the heavy responsibility that people commonly put on it – rely on urbanization to sustain China’s rapid economic growth?

The difficulty in understanding is not small. Land, of course, is the mother of wealth, but it has no legs, and can’t run off to the city on its own. “Land urbanization” is not a spontaneous phenomenon, but is undoubtedly the result of human behaviour. So we must ask: what kind of incentives motivated people to prioritize “city enclosure” over “population urbanization”.

The title of this article proposes an answer: “rights are not balanced”. Let’s explain this a bit: the flow and reallocation of resources between urban and rural areas involve arranging institutional rights at various levels. Thus, we can also simplify things by focusing on the lack of balance between two sets of rights. On the one side, the rights of farmers to live in the city is made relatively light of; on the other hand, the rights to reallocate rural land for urban use is emphasized. And so by comparison, with one set of rights abnormally light, and one set abnormally heavy, lack of balance ensues.

Let’s first look at the constitution. The 54 constitution included “freedom of movement for the citizens”, but this was not actually well implemented. The 1975 constitutional rearrangement, in the middle of the “Cultural Revolution”, took that set of rights “out of the Constitution” altogether, and until today, it has not been recovered. We are all aware of this. By contrast, “urban land is entirely State property”, and “The State, in the name of public interest, can, in accordance with the relevant regulations, expropriate实行征收 or expropriate with compensation 征用并给予补偿“, 则都是宪法准则，有明确的表达，and receive constitutional protection. So at the constitutional level, the respective weight of the citizen’s rights to choose their place of residence and the rights of the State to acquire land is immediately visible.

Let’s consider it from the angle of “negative freedom”. Do farmers have the freedom to refuse to move, refuse to relocate, refuse to live in the city? The answer is yes in general. However, many reports on ‘farmers forced to move to the city’ cannot by let many people unsatisfied. In contrast to farming land, ‘city land all belongs to the State’, and so whose land becomes urbanise entirely depends on urban planning and administrative approvals, there is no way to refuse. This land is not a commodity that can be freely traded, and when the land is requested, even if the occupier entirely disagrees, there is no way to resist. The statutory compensation for land acquisition does not leave a space for legitimate mutual bargaining, 更不可以“买卖不成仁义在”，下次再说吧. From this point of view, farmers’ refusals to move to the city involves more ‘negative freedom’ than rural land refusing to urbanise.

Now let’s look back at the facts. From the early 80s, there has been a large-scale movements of farmers moving to cities to work, open businesses and settle has become the trend. We already mentioned the 1984 ‘approval’ from central administration.In the 90s, with China’s access to the WTO on the basis of complementarity, China’s East coast became the world’s factory, and long-distance, inter-provincial flows of migrant workers has become common practice. The most iconic manifestation of this is the hundreds of millions getting back to rural areas for the “Spring Festival”. This shows that change happens more quickly in life practice than in the text of the law, and also proves the large-scale changes in China’s urban-rural relations. However, more careful observation reveals that flows of workers are one thing, and settling down is another. The later involves household registration, education of children, and problems of social security and health insurance, which are much more trouble than simple flows of workers. Based on a series of observations according to city status, we can see that for newcomers to settle in a small town is easy, but settling in a big city is very difficult. This also forms a broad contrast with the phenomenon of rural land urbanisation: the higher the status of the city, the more power it has to absorb more land, and therefore the more it expands.

No matter how we look at it, the rights of farmers to move to the city and the rights for the land to become urbanized have both increased. But the outstanding problem is, 此两项事关城市化大局的关键权利，’progress and development’ is very uneven. The conclusion is that urbanizing land is easy, but urbanizing farmers is hard. This is the reason why ‘the urbanisation of land is faster the the urbanisation of people’. 而我们的分析，也将由此入彼、由表入里，要追溯到制度安排的非平衡层面，and increase our understanding of urbanisation with Chinese characteristics.

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